But it stood firm behind its banks, taking over their bad loans, injecting capital and guaranteeing their liabilities to shield their creditors from losses.
But Benjamin Williamson, senior economist at the Centre for Economics and Business Research CEBRR), welcomed the latest Bank of England data: ""For more than two years now homeowners have been investing more in their properties than they have been taking out in new secured loans, injecting nearly £50bn into housing equity since the second quarter of 2008.
What quantitative easing was supposed to do was give money to banks, which they were supposed to loan out, injecting money into the wider economy, but they haven't done that.
So the Fed dusted off other ways of injecting money into the economy, through loans, loan guarantees, and purchases of government securities.
The Institute for International Finance sees an even steeper fall; it says that this year banks will extract more from emerging markets in debt repayments than they inject in new loans.
Her plan, combined with $1.3 trillion in cheap loans injected into the banking system by the European Central Bank in December and March, raised hopes that the worst of the crisis had passed.
Often, the only way to prevent the banks from collapsing is for the government to bail them out, by injecting new capital or guaranteeing bad loans.
Forbes: Yes, you acquired that property by taking on its $120 million mortgage, injecting equity and getting $100 million in fresh loans from a group of Canadian banks.
Washington Mutual surged on reports that private-equity firm TPG and other investors are on the verge of injecting $5 billion into the battered savings and loan company.
The fund also recommended injecting capital into commercial banks in preparation for loan write-offs.
